Issue No. 851
After Winter Must Come Spring
Airlines Signal End of Pandemic Crisis Is Near With Aircraft Orders
Pushing Back: Inside The Issue
"We are now past the inflection point," Air Lease Corp. Executive Chairman Steven Udvar-Hazy said last week. By the lessor's reckoning, CEO John Plueger noted, the inflection point occurred some time in the second half of last year, even as the world was grappling with the surges of the Delta and Omicron coronavirus variants. ALC isn't alone. Both Airbus and Boeing have notched significant orders in the last few months, as airlines rush to replace older, less fuel-efficient aircraft with newer jets. Air Canada, Air France-KLM, and Norwegian Air are just the latest airlines to think 2022 could be the "hot vaxxed summer" that last summer was meant to be.
The aviation industry has had a poor track record of forecasting inflection points during this pandemic, but signs suggest this time they may be on to something. It's not just the aircraft orders. Airlines are rushing to add new routes seemingly everywhere as they see demand start to heat up for spring and summer travel. The booking curve is lengthening out. Business travel remains depressed, but even there, conferences and trade shows are returning, and offices are reopening. Vaccination rates continue to climb. Economic output and hiring are rising in much of the world.
But, as Plueger and Udvar-Hazy said last week, the road to recovery will not be linear, and the industry that emerges could be very different from that of March 2020. Long-haul international travel remains depressed, especially to and within Asia. Atlas CEO John Dietrich isn't convinced passenger demand to China will recover any time soon. But Air Canada Chief Commercial Officer Lucie Guillemette brushed off that concern by saying: "We have found other opportunities." It is now apparent that cargo will continue to be a major part of the airline business and not just a pandemic stopgap. Business travel may be forever changed, as we explore in the podcast. Not gone, just different.
So are they right? After two years of winter, is it finally spring? And what will the industry look like as it emerges? Stay tuned.
The Airline Weekly Lounge Podcast
This week in the 'Lounge, Accenture’s Emily Weiss, global travel lead, and Scott Davidson, managing director-travel industry, talk to host Madhu Unnikrishnan about how different business travel may look when it returns. If the pandemic has taught the travel industry anything it’s the “art of the possible,” Weiss noted. Will digital nomads offset the slow return of business travel for airlines? And just how promising are eVTOLs in solving the urban mobility conundrum? Listen to this week’s episode to find out. Go here for the podcast's archive.